Hedge fund managers including Chris Hohn, Crispin Odey and Dan Loeb have each generated double-digit returns since the beginning of 2013.

Although most of the high-rolling sector is still struggling to live up to its reputation – the latest Goldman Sachs Hedge Fund Trend Monitor shows the average year-to-date returns are just 5pc – some of the stars have manage to notch up stellar returns.

The smart money has been placed on large bets that action by central banks will continue to fuel stock markets, despite underlying economic problems.

And managers have been richly rewarded as the FTSE 100 hit its highest level since 2000 last week; despite falls yesterday and late last week, Japan’s Nikkei has risen nearly 70pc since last November; and the Dow Jones has soared to a record high.

London-based Mr Hohn, who runs The Children’s Investment fund, generated 8.5pc in April alone, taking his returns over six months to 30pc. Mr’s Odey’s flagship €1.6bn (£1.37bn) European fund is up 16.8pc to the end of April, adding to the 30.7pc the fund generated last year.

Meanwhile in America, Third Point’s Mr Loeb has cemented his position as one of the most successful money managers in the world by generating 13.5pc in his $5.7bn (£3.7bn) offshore fund, and 34pc in his $2.2bn Ultra fund, to May.

Hugh Sloane of Sloane Robinson, has returned 26.7pc, albeit on a smaller scale in his $450m fund at Sloane Robinson, according to figures collected by HSBC.

At CQS, Michael Hintze’s $1.8bn Directional fund up is up 8.8pc. At the end of last year, Mr Hintze predicted that quantitative easing would continue to fuel a rise in global stock markets.

In a note to investors, the Tory donor and philanthropist, said: “We have witnessed massively accommodative monetary policies globally since the onset of the global financial crisis in 2008.” He added: “Overall, I believe central bank actions will continue to support credit and equity markets in 2013.”

Meanwhile, Philippe Jabre, the former star of GLG Partners who quit suddenly and moved to Switzerland, has generated big returns, albeit from a small base. His $177m global Convertible fund is up 17pc so far this year to May 7; his $194m global balanced fund is up 26pc; and a $146m multi-strategy fund is up 29pc, 10.5pc this year.

The Bank of England has pumped £375bn of money into the economy since the start of its QE programme in 2009, while central banks in America and Japan have unleashed hundreds of billions of dollars in a radical global bid to jump-start the economy.

The effect has been to boost the price of assets, from equities to houses, and reduce gilt yields, according to analysis by the Bank.

Philippe Bonnefoy, founder of Eleuthera Capital, said: "Central banks have come to the rescue of global capital markets, doing "whatever it takes" to improve the underlying investor confidence level. This "risk on" effect has driven equities higher even if we have yet to see any real growth in corporate revenues or solid economic traction in the US or Europe." He added: "There remains a fear about how we move on from this central bank "unconventional" policy environment - as it has never been done before. An exit to this central bank experiment is predicated on sustained economic growth that we have yet to witness."

Other government policies, such as the Help to Buy scheme announced in the last Budget, have led to hedge funds buying UK housebuilders and construction companies.

Artemis UK/European Hedge, the fund run by former New Star manager Tim Steer, is up 13.1pc in the last six months.

Mr Steer said: “We’ve generally taken more net long positions – whereas hedge funds have been worried about markets, they are less worried now. In the UK we’ve had exposure to housebuilders, retailers and central London property. Other big winners in the period have been easyJet, Ashtead and Howden.”

Hedge funds have also made money by calculating some notable shorts.

Last week Elliott Management made £2.5m in a matter of minutes with a large short position in First Group after the transport company announced a deeply discounted £615m rights issue.

Alternative

For those who can’t afford hedge fund fees, there’s a cheaper offer on option: a fund that tracks the top managers and simply buys what they’ve bought.

Dubbed the 'Poor Man’s Hedge Fund’ by Bloomberg, Global X Top Guru Holdings is an exchanged traded fund that scours the US regulatory announcements for the holdings of top hedge fund managers. The ETF searches the 13F announcements, which are filed every quarter by fund managers to America’s SEC, for big holdings.

But it also finds stakes that hedge funds have held for a long time and filters out the stocks that have been flipped in the short term. “Hedge funds with high turnover are eliminated from the pool,” the company says in its marketing material.

The fees are higher than most ETFs - 0.75pc or $75 a year for $10,000 investment - but far cheaper than most hedge funds which typically charge 2pc management fee and 20pc of the performance.

While some may sniff at the irregular strategy, the performance is not to be sneezed at: in less than a year, the ETF is up 52pc, compared to the S&P 500 Index which is up 18pc.

The company says: “The goal of the Global X Top Guru Holdings Index ETF is to aggregate on a quarterly basis the ideas and knowledge of hedge fund managers into the transparent, cost-efficient and easily accessible format of an ETF.”